electricity scenario analysis and transmission … planning presentation 8-28.pdf · electricity...

Electricity Scenario Analysis and Transmission Planning Workshop

New Hampshire Public Utilities CommissionLegislative Office BuildingConcord, NH

August 29, 2007

Regional System Planning in New England

Stephen WhitleySenior Vice President and Chief Operating OfficerISO New England

© 2007 ISO New England Inc. 3

Highlights

• Key Drivers for Transmission Expansion in New England– Peak demand growth– Mandatory NERC Reliability Standards– Limited bulk transmission investment for 30 years prior to 2000– Market efficiency within the region


Continued Growth in Peak DemandApprox. 500 MW per year over the next decade

1991-2006 History, 2007-2016 RSP07 50/50 Forecast

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1991 92 93 94 95 96 97 98 99 00

2001 02 03 04 05 06

2007 08 09 10 11 12 13 14 15

2016


Developing Power System Infrastructure and Resources• Transmission

– Needed to maintain reliability in the region as demand grows– Improves access to additional or diverse power supplies

• Capacity resources– Different types of generation needed to meet different operational

needs (e.g., baseload, fast-start, dual-fuel)– Demand-side resources (e.g. energy efficiency, demand

response, conservation) moving from programs to markets


Overall Transmission Development Process• Identify needs • Derive possible solutions • Define project • Achieve ISO Reliability and Cost approvals • Begin state siting • Stakeholder input throughout


System Planning: Authority

• FERC granted ISO responsibility for regional system planning for the six-state region in 2000

• Part of a federally-approved tariff– ISO is reviewing its planning process with New England

stakeholders following the latest FERC order to promote open access to the transmission system

• Mandatory reliability standards reinforce importance of planning for the region


System Planning: Guided by Reliability Standards• North American Electric

Reliability Corporation– Reliability Standards for the

Bulk Power Systems of North America

• Northeast Power Coordinating Council– Basic Criteria for the Design

and Operation of Interconnected Power Systems

• ISO-NE– Reliability Standards for the

New England Area Bulk Power Supply System

Standards are used to ensure that the regional transmission system can reliably deliver power to consumers under a wide range of future system conditions.

NPCC


System Planning

• Regional System Plan (RSP) – RSP07 is the 7th annual regional system plan– RSP07 looks at system needs for 2007–2016– Regular updates on status of transmission

projects in the plan

• Objectives:– Provides opportunities for market solutions

• E.g. generation, demand-side measures, and merchant transmission

– Provides a transmission plan as a backstop for reliability

• Can be modified based on market solutions that develop

– RSP does not constitute an integrated resource plan

Planningis

Ongoing


System Planning: Process

• Open Planning Process– Stakeholders provide input through monthly meetings of the

Planning Advisory Committee (PAC)• ISO posts draft report and holds special PAC meeting to hear

comments

– Representatives of ISO Board meet with States and other stakeholders to discuss RSP

• ISO posts revised draft report in advance of annual public meeting in Boston (September 6, 2007)


Types of Transmission Upgrades

• Generation Interconnection

• Elective Transmission

• Merchant Transmission

• Local Benefit Upgrades

• Regional Benefit Upgrades– Reliability and Market Efficiency

Upgrades• Localized Costs excluded from

regional cost support

Generally funded by the entity proposing the project

Funded by the region


ISO-NE Review of Proposed Projects

• ISO-NE Reliability Review

– Review and approval of all additions to the bulk power system (generation and transmission) pursuant to FERC-approved Tariff

• Advisory input from NEPOOL Reliability Committee

• Participation of state representatives

– Precursor to cost review for transmission projects

• ISO-NE Cost Allocation Review

– Review all costs of transmission proposed to be included in the regional rate pursuant to FERC-approved Tariff

• Advisory input from NEPOOL Reliability Committee

• Open stakeholder meetings to review large projects

• Participation of state representatives


Process for Transmission Cost Sharing

• Applies to projects that benefit the region– ISO conducts independent cost review, with stakeholders input

• Are costs reasonable, in accordance with good utility practice, and justified for regional costs support?

• Projects (or elements of projects) not providing a regional benefit are deemed “localized” and are not paid for by the region

• FERC-approved process developed with stakeholders– Developed through an extensive stakeholder process in 2002/03– Approved by FERC in December 2003


Region Supports Cost of Transmission Investment based on Percent of Consumption

Maine8.4%

New Hampshire9.2%

Vermont4.1%

Massachusetts45.5%

Rhode Island7.0%

Connecticut25.7%

Based on network load for 2006/07 power year


Investment in New England Transmission

• Major investment in transmission– More than 200 projects representing an investment of about $1.2

billion is in-service (2002 through 2007)– $3 to $6 billion active transmission projects– Three major new 345-kV projects constructed and put into

service in three states• An additional three 345-kV projects are under construction in three

states– Active participation of New England States and other

stakeholders in an open planning process has been instrumental in this success

• New studies are underway for all areas of New England


(1) Costs as of July 5, 2007

Investment In New England Transmission (cont.)

$195

$141$141$107$79

$490

$16

$974

$343

$202

$95

$1,169

$833

$0

$200

$400

$600

$800

$1,000

$1,200

2002 2003 2004 2005 2006 2007Year

Cos

t in

mill

ions

$0

$200

$400

$600

$800

$1,000

$1,200

Costs of Projects Projected 2007 Costs

Cumulative Costs Projected Cumulative Costs

Qty: 30

Qty: 26Qty: 7

Qty: 51

Qty: 51

(1)

Qty: 17

Qty: 26


Major Transmission Projects and Studies1. NSTAR 345 kV Project

a. Phase Ib. Phase II

2. Northeast Reliability Interconnect3. Northwest Vermont4. SWCT Phase I5. SWCT Phase II6a. NEEWS6b. Greater Rhode Island6c. Springfield 115 kv Reinforcements7. Maine Power Connection8. Maine Power Reliability Program9. Southeast Massachusetts10. Monadnock Area

32

4

5 6

1b

8

7

9In service

Under construction

Under study

1a

10


Key New Hampshire Transmission Project• Monadnock Area Reliability

Project– Strengthen transmission

system in southwestern NH• As well as southeastern VT,

and north central MA– ISO reliability review complete– $55 million investment in New

Hampshire• Rebuild 115-kV lines along

existing routes• New 115-kV/345-kV substation

at Fitzwilliam• Upgrade other equipment

– Expected in service by 2009


Process for Generation

• Markets for supply resources– Competitive wholesale electricity markets to achieve adequate power

supply resources to ensure a reliable power system• Pay-for-performance provisions for all resources

– Proposals for 12,000 MW of new resources in response to the new capacity market

• Resources to compete in February 2008 auction to supply system needs beginning in June 2010

• Connecting to the Grid– Generation proposals subject to ISO reliability review

• Projects must not create adverse reliability impacts on the system– Proposals studied in the order received

• Interconnection study “queue” updated regularly on ISO Web site


Forward Capacity Market Process

• Procure enough capacity to meet New England’s forecasted Installed Capacity Requirements three years in the future

• Select a portfolio of Supply and Demand Resources through a competitive Forward Capacity Auction process– Proposed resources must be pre-qualified to participate in the auction

• New resources must provide detailed project plans with milestones to complete projects by the commitment period

• ISO to notify resources of qualification determination in October– Proposed resources must participate and clear in the auction to be paid

for capacity

• Provides a long-term (up to 5 year) commitment to New Supply and Demand Resources to encourage investment


FCM Qualification Package Applications Proposed Resources by Type (MW and %)

Imports3,60030%

Demand Resources

2,20018%

Supply Resources

6,20052%


FCM Qualification Package Applications Proposed Resources by State (MW and %)

Massachusetts1,10050%

Connecticut52524%

Maine2009%

Vermont1005%

Rhode Island1567%

New Hampshire1075%

Connecticut3,25052%

Maine2003%

ntNew Hampshire

20%

Massachusetts2,70243%

Vermo901%

Rhode Island331%

Demand Resources Supply Resources


New Hampshire Projects in the Queue

Project Name*FuelType

Summer Capacity

(MW)

Winter Capacity

(MW) CountyHydro Project Water 169 170 GraftonCombined Cycle Natural Gas 563 616 RockinghamWind Project Wind 100 100 CoosWind Project Wind 146 146 CoosBiomass Project Wood 56 68 CoosBiomass Project Wood 45 45 HillsboroBiomass Project Wood 41 41 CoosBiomass Project Wood 41 41 CoosBiomass Project Wood 17 17 GraftonWind Project** Wind 24 24 SullivanWind Project** Wind 34 34 CoosLandfill Gas** LFG 6 6 Coos

* Project developers are not revealed until an interconnection agreement is reached.** Project proposes to connect to the distribution system.


Conclusions

• Peak demand growth makes us look at ways to use electricity (and the power system) more efficiently

• Developers and resource owners will face increasing restrictions on environmental emissions

• New capacity market leads to new resources, including integration of demand resources

• Regional System Planning process (including the existing transmission cost allocation methodology) is successful at getting transmission built across New England


Questions

electricity scenario analysis and transmission … planning presentation 8-28.pdf · electricity...

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